Mid Europa offloads Polish, Czech businesses

7 Dec 2010

Mid Europa Partners, a private equity firm focused on central Europe, has confirmed the PLN870 million (USD288 million) cash sale of Polish cableco Aster City – the nation’s fourth largest cable operator by subscribers – to Liberty Global Inc, in a deal worth EUR599.7 million (USD799.3 million) including debt. Nasdaq-listed Liberty Global already owns Poland’s largest cable player UPC. As well as acquiring all of Aster’s shares, the US-based company will take on Aster’s net debt of PLN1.53 billion, some of which is held by Mid Europa. The deal is subject to approval from Poland’s anti-monopoly authorities, but if completed, marks the largest private equity exit in central Europe, excluding Russia, in 2010. The total value of the sale represents a mark-up on the EUR412 million that Mid Europa Partners paid for Aster In December 2005, when it bought the company from London-based Lion Capital, acting as advisor to the Hicks, Muse, Tate & Furst Europe Fund.

Liberty Global’s CEO Mike Fries said of the takeover: ‘The Polish cable market is highly fragmented and this is a natural and necessary step towards consolidating the industry.’ According to TeleGeography’s GlobalComms Database UPC had 498,000 broadband internet customers at 30 September 2010, compared to 176,000 for Aster.

In a separate announcement Mid Europa Partners has confirmed it is selling Czech radio, data transmission and telecoms operator Ceske Radiokomunikace for EUR574 million (USD765 million). The fund, which acquired the Czech operator in 2006, has reached an agreement to sell 100% of the company to a consortium of funds managed by Macquarie, it said in a statement. ‘Falcon Group, a consortium of investors 75%-controlled by funds managed or advised by Mid Europa Partners, announces that it has entered into an agreement to sell 100% of Ceske Radiokomunikace. The timing of the two transactions was a coincidence’, said Matthew Strassberg, a partner with Mid Europa. ‘It’s a pure coincidence, we had two assets we thought were ripe for an exit,’ he added. However, market watchers note that the two exits are part of a growing trend of private equity groups selling their telecoms stakes, now that market conditions have slowed to more normal levels following the financial crisis of 2008/09.

Czech Republic, Poland, Aster, Ceske Radiokomunikace (CRa), Liberty Global (incl. LGI)